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Lawsuit: Lottery fraud reduced winner's payout

Grant Rodgers
The Des Moines Register
In this July 15, 2015 file photo, Eddie Tipton looks over at his lawyers before the start of his trial in Des Moines. The former security director of the Multi-State Lottery Association, accused of tampering with lottery drawings to rig jackpots in four states, was convicted of fraud in the attempt to claim a $16.5 million jackpot in Iowa.

DES MOINES, Iowa — “Lucky” Larry Dawson won $6 million dollars from a Hot Lotto ticket, but he would have been even luckier if a lottery security chief hadn’t rigged the game and reduced his payout, according to a newly filed lawsuit.

The lawsuit filed in Polk County, Iowa, District Court on behalf of Dawson is the latest turn in an ongoing fraud investigation centered on Eddie Tipton, a former information security director at the Multi-State Lottery Association who was convicted in July of fixing the outcome of a drawing and purchasing a ticket worth $10 million in cash.

The heart of Dawson's claim: He could've pocketed $16 million in cash from the ticket he purchased at a Webster City gas station if Tipton's cheating hadn't re-set the Hot Lotto jackpot to $1 million months earlier.

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The lawsuit asks the Urbandale-based lottery association and the Iowa Lottery Authority to pay Dawson an additional $10 million, claiming the two groups failed for years to properly audit their games and wrongly treated the Dec. 29, 2010, game tainted by Tipton as a "legitimate" drawing.

"The question that our lawsuit poses and that we think should be very easy to answer is, 'If you can't trust the lottery to pay you in full when you win, why would you ever play,’ " said Des Moines attorney Jerry Crawford, who's litigating the claim with law partner Nick Mauro.

Dawson himself was not at the Wednesday afternoon news conference when Crawford announced the suit, and the attorney said Dawson and his wife are not looking for "limelight or attention." Dawson, a financial planner, made several charitable donations out of his first $6 million in winnings, Crawford said.

Larry Dawson and his wife claim the $9 million prize, worth $6 million in cash, from the Hot Lotto jackpot he won in 2010. Dawson is suing the lottery, alleging a jackpot rigging scheme shortchanged him.

"The odds aren't exactly what we'd call great to win the lottery," he said. "And if you actually win, you should get your prize. And he hopes, they hope that this will send a very clear message that this kind of conduct isn't going to be tolerated."

Iowa Lottery CEO Terry Rich said in a brief statement Wednesday that the lottery believes Dawson was paid all the money he was owed

“It is impossible to rewrite history," Rich said. "No one can know what would have occurred in this case had any event in it been changed. We believe that Mr. Dawson rightfully was paid the jackpot to which he was entitled. ... Our lottery will defend its efforts to protect lottery players in any forum, including in this litigation.”

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